The Varkud Satellite RNA contains a self-cleaving ribozyme that has been shown to function independently of its surroundings. This 160 nucleotide ribozyme adopts a catalytically active tertiary structure that includes a kissing hairpin complex formed by stem-loop I and stem-loop V (SLV). The five-nucleotide 5′-rUGACU loop of the isolated SLV has been shown to adopt a Mg2+-dependent U-turn structure by solution NMR. This U-turn hairpin is examined here by molecular dynamics simulations in the presence of monovalent and divalent ions. Simulations confirm on an all-atom level the hypotheses for the role of the Mg2+ ions in stabilizing the loop, as well as the role of the solvent exposed U700 base. Additionally, these simulations suggest the Mg2+-free stem-loop adopts a wide range of structures, including energetically favorable structures similar to the Mg2+-bound loop structure. We propose this structure is a "gatekeeper" or precursor to Mg2+ binding when those ions are present.